Toshiba to Shift Mobile Phone Production Overseas
Posted on: Wednesday, 20 May 2009, 13:26 CDT
Toshiba announced on Wednesday that it plans to discontinue its mobile phone production in Japan and move to outsource jobs in order to cut costs during an economic climate with weakening demand for gadgets.
Toshiba said it would shut down its domestic mobile phone plant in October. The 200 employees that currently work in production at the Hino plant will be shifted to other sectors within the company, Toshiba said.
The company added that it would continue smartphone production at the plant in Hangzhou China.
The company’s latest announcement comes just after it announced its revenue for mobile phones decreased by almost half to 140 billion yen ($1.5 billion) in the recent fiscal year that ended in March.
"Consumers are reluctant to buy new mobile phone handsets amid an economic downturn. The Japanese mobile phone market was really hit hard by the ongoing economic slump," said Toshiba spokeswoman Yuko Sugahara.
Toshiba’s net loss reached a record 343.6 billion yen in the recent fiscal year, compared to a reported net profit of 127.4 billion yen the previous year.
Annual sales were down 13 percent to 6.65 trillion yen. According to the Associated Press, Toshiba’s mobile phone business only accounts for about 3 percent of its total operations.
On Tuesday, Toshiba filed a lawsuit against eight companies that produce blank DVDs claiming that none of the companies hold licensing agreements with Toshiba or the DVD6C Licensing Group covering recordable DVD media.
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Source: redOrbit Staff & Wire Reports
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